复旦大学国际贸易InternationalTrade英文原版(4)

1、To Accompany by Paul R. Krugman and Maurice ObstfeldSlide 4-2Copyright 2003 Pearson Education, Inc.IntroductionA Model of a Two-Factor EconomyEffects of International Trade Between Two-Factor EconomiesEmpirical Evidence on the Heckscher-Ohlin ModelSummaryAppendixChapter OrganizationSlide 4-3Copyrigh

2、t 2003 Pearson Education, Inc.IntroductionIn the real world, while trade is partly explained by differences in labor productivity, it also reflects differences in countries resources.The Heckscher-Ohlin theory:Emphasizes resource differences as the only source of tradeShows that comparative advantag

3、e is influenced by: Relative factor abundance (refers to countries/endowment) Relative factor intensity (refers to goods/technology)Is also referred to as the factor-proportions theorySlide 4-4Copyright 2003 Pearson Education, Inc.Assumptions of the ModelAn economy can produce two goods, cloth and f

4、ood.The production of these goods requires two inputs that are in limited supply; labor (L) and land (T).Production of food is land-intensive and production of cloth is labor-intensive in both countries.Perfect competition prevails in all markets.A Model of a Two-Factor EconomySlide 4-5Copyright 200

5、3 Pearson Education, Inc./Input combinations that produce one calorie of foodUnit land input aTF ,in acres per calorieUnit land input aLF ,in hours per calorieA Model of a Two-Factor EconomyFigure 4-1: Input Possibilities in Food ProductionIso-quant CurveSlide 4-6Copyright 2003 Pearson Education, In

6、c.Factor Intensity In a world of two goods (cloth and food) and two factors (labor and land), food production is land-intensive, if at any given wage-rental ratio the land-labor ratio used in the production of food is greater than that used in the production of cloth: TF / LF TC / LC Example: If foo

7、d production uses 80 workers and 200 acres, while cloth production uses 20 workers and 20 acres, then food production is land-intensive and cloth production is labor-intensive.A Model of a Two-Factor EconomySlide 4-7Copyright 2003 Pearson Education, Inc.CCFFWage-rental ratio, w / rLand-laborratio, T

8、 / LA Model of a Two-Factor EconomyFigure 4-2: Factor Prices and Input ChoicesTwo implications!Slide 4-8Copyright 2003 Pearson Education, Inc.Factor Prices and Goods PricesA Model of a Two-Factor EconomySlide 4-9Copyright 2003 Pearson Education, Inc.SSRelative price ofcloth, PC/PFWage-rentalratio, w

9、/rA Model of a Two-Factor EconomyFigure 4-3: Factor Prices and Goods PricesSlide 4-10Copyright 2003 Pearson Education, Inc.FFCCSSLand-labor Ratio, T/LRelativeprice ofcloth, PC/PFWage-rentalratio, w/r(PC/PF)1(TC/LC)2(TC/LC)1(TF/LF)2(TF/LF)1(w/r)2(w/r)1IncreasingIncreasingA Model of a Two-Factor Econo

10、myFigure 4-4: From Goods Prices to Input Choices(PC/PF)2Slide 4-11Copyright 2003 Pearson Education, Inc.An increase in the price of cloth relative to that of food, PC/PF ,will:Raise the income of workers relative to that of landowners, w/r. Raise the ratio of land to labor, T/L, in both cloth and fo

11、od production and thus raise the marginal product of labor in terms of both goods. Raise the purchasing power of workers and lower the purchasing power of landowners, by raising real wages and lowering real rents in terms of both goods.A Model of a Two-Factor EconomySlide 4-12Copyright 2003 Pearson

12、Education, Inc.A Model of a Two-Factor EconomyStolper-Samuelson Theorem (effect): If the relative price of a good increases, holding factor supplies constant, then the nominal and real return (in terms of both goods) to the factor used intensively in the production of that good increases, while the

13、nominal and real return (in terms of both goods) to the other factor decreases.Slide 4-13Copyright 2003 Pearson Education, Inc.Resources and OutputHow is the allocation of resources determined? Given the relative price of cloth and the supplies of land and labor, it is possible to determine how much

14、 of each resource the economy devotes to the production of each good.A Model of a Two-Factor EconomySlide 4-14Copyright 2003 Pearson Education, Inc.LFTFLCTCLabor used in food productionLabor used in cloth productionOFIncreasingIncreasingIncreasingIncreasingLand used in cloth productionLand used in f

15、ood production1FCOCA Model of a Two-Factor EconomyFigure 4-5: The Allocation of ResourcesSlide 4-15Copyright 2003 Pearson Education, Inc.How do the outputs of the two goods change when the economys resources change?Rybczynski Theorem (effect): If a factor of production (T or L) increases, then the s

16、upply of the good that uses this factor intensively increases and the supply of the other good decreases for any given commodity prices.A Model of a Two-Factor EconomySlide 4-16Copyright 2003 Pearson Education, Inc.CL2FL2CT1FT1CF1L1FL1CT2FT2C1A Model of a Two-Factor EconomyFigure 4-6: An Increase in

17、 the Supply of LandLabor used in food productionLabor used in cloth productionIncreasingIncreasingIncreasingIncreasingLand used in cloth productionLand used in food productionF2O1FO2F2OCSlide 4-17Copyright 2003 Pearson Education, Inc.TT1TT2Output offood, QFOutput ofcloth, QCSlope = -PC/PFSlope = -PC

18、/PF2Q2FQ2C1Q1FQ1CA Model of a Two-Factor EconomyFigure 4-7: Resources and Production PossibilitiesSlide 4-18Copyright 2003 Pearson Education, Inc.An increase in the supply of land (labor) leads to a biased expansion of production possibilities toward food (cloth) production. The biased effect of inc

19、reases (decreases) in resources on production possibilities is the key to understanding how differences in resources give rise to international trade. An economy will tend to be relatively effective at producing goods that are intensive in the factors with which the country is relatively well-endowe

20、d.A Model of a Two-Factor EconomySlide 4-19Copyright 2003 Pearson Education, Inc.Assumptions of the Heckscher-Ohlin model:There are two countries (Home and Foreign) that have: Same tastes Same technology Different resources Home has a higher ratio of labor to land than Foreign doesEach country has t

21、he same production structure of a two-factor economy.Effects of International Trade Between Two-Factor EconomiesSlide 4-20Copyright 2003 Pearson Education, Inc.Relative Prices and the Pattern of TradeFactor Abundance Home country is labor-abundant compared to Foreign country (and Foreign is land-abu

22、ndant compared to Home) if and only if the ratio of the total amount of labor to the total amount of land available in Home is greater than that in Foreign:L/T L*/ T* Example: if America has 80 million workers and 200 million acres, while Britain has 20 million workers and 20 million acres, then Bri

23、tain is labor-abundant and America is land-abundant. In this case, the scarce factor in Home is land and in Foreign is labor.Effects of International Trade Between Two-Factor EconomiesSlide 4-21Copyright 2003 Pearson Education, Inc.When Home and Foreign trade with each other, their relative prices c

24、onverge. The relative price of cloth rises in Home and declines in Foreign. In Home, the rise in the relative price of cloth leads to a rise in the production of cloth and a decline in relative consumption, so Home becomes an exporter of cloth and an importer of food. Conversely, the decline in the

25、relative price of cloth in Foreign leads it to become an importer of cloth and an exporter of food.Effects of International Trade Between Two-Factor EconomiesSlide 4-22Copyright 2003 Pearson Education, Inc.RDRSRS*123Effects of International Trade Between Two-Factor EconomiesFigure 4-8: Trade Leads t

26、o a Convergence of Relative PricesRelative price of cloth, PC/PFRelative qualityof cloth, QC + Q*C QF + Q*FSlide 4-23Copyright 2003 Pearson Education, Inc.Heckscher-Ohlin Theorem:A country will export that commodity which uses intensively its abundant factor and import that commodity which uses inte

27、nsively its scarce factor.Effects of International Trade Between Two-Factor EconomiesSlide 4-24Copyright 2003 Pearson Education, Inc.Trade and the Distribution of IncomeTrade produces a convergence of relative prices.Changes in relative prices have strong effects on the relative earnings of labor an

28、d land in both countries: In Home, where the relative price of cloth rises:Laborers are made better off and landowners are made worse off. In Foreign, where the relative price of cloth falls, the opposite happens: Laborers are made worse off and landowners are made better off.Owners of a countrys ab

29、undant factors gain from trade, but owners of a countrys scarce factors lose.Effects of International Trade Between Two-Factor EconomiesSlide 4-25Copyright 2003 Pearson Education, Inc.Difference between the specific factors model and the Heckscher-Ohlin model in terms of income distribution effects:

30、The specificity of factors to particular industries is often only a temporary problem. Example: Garment makers cannot become computer manufactures overnight, but given time the U.S. economy can shift its manufacturing employment from declining sectors to expanding ones. In contrast, effects of trade

31、 on the distribution of income among land, labor, and capital are more or less permanent.Effects of International Trade Between Two-Factor EconomiesSlide 4-26Copyright 2003 Pearson Education, Inc.Factor Price EqualizationIn the absence of trade: labor would earn less in Home than in Foreign, and lan

32、d would earn more.Factor-Price Equalization Theorem: International trade leads to complete equalization in the relative and absolute returns to homogeneous factors across countries. It implies that international trade is a substitute for the international mobility of factors.Effects of International

33、 Trade Between Two-Factor EconomiesSlide 4-27Copyright 2003 Pearson Education, Inc.Has international trade equalized the returns to homogeneous factors in different countries in the real world? Even casual observation clearly indicates that it has not. Example: Wages are much higher for doctors, eng

34、ineers, technicians, mechanics and laborers in the United States and Germany than in Korea and Mexico. Under these circumstances, it is more realistic to say that international trade has reduced, rather than completely eliminated, the international difference in the returns to homogeneous factors.Ef

35、fects of International Trade Between Two-Factor EconomiesSlide 4-28Copyright 2003 Pearson Education, Inc.Effects of International Trade Between Two-Factor EconomiesTable 4-1: Comparative International Wage Rates (United States = 100)Slide 4-29Copyright 2003 Pearson Education, Inc.Three assumptions c

36、rucial to the prediction of factor price equalization are in reality untrue: Both countries produce both goods Both countries have the same technologies in production Both countries have the same prices of goods due to tradeEffects of International Trade Between Two-Factor EconomiesSlide 4-30Copyrig

37、ht 2003 Pearson Education, Inc.Testing the Heckscher-Ohlin ModelTests on U.S. Data Leontief paradox Leontief found that U.S. exports were less capital-intensive than U.S. imports, even though the U.S. is the most capital-abundant country in the world.Empirical Evidence on the Heckscher-Ohlin ModelSl

38、ide 4-31Copyright 2003 Pearson Education, Inc.Table 4-3: Factor Content of U.S. Exports and Imports for 1962Empirical Evidence on the Heckscher-Ohlin ModelSlide 4-32Copyright 2003 Pearson Education, Inc.Tests on Global Data A study by Bowen, Leamer, and Sveikauskas tested the Heckscher-Ohlin model u

39、sing data for a large number of countries. This study confirms the Leontief paradox on a broader level.Slide 4-33Copyright 2003 Pearson Education, Inc.Empirical Evidence on the Heckscher-Ohlin ModelTable 4-4: Testing the Heckscher-Ohlin ModelSlide 4-34Copyright 2003 Pearson Education, Inc.Tests on N

40、orth-South Trade North-South trade in manufactures seems to fit the Heckscher-Ohlin theory much better than the overall pattern of international trade.Empirical Evidence on the Heckscher-Ohlin ModelSlide 4-35Copyright 2003 Pearson Education, Inc.Empirical Evidence on the Heckscher-Ohlin ModelTable 4

41、-5: Trade Between the United States and South Korea, 1992 (million dollars)Slide 4-36Copyright 2003 Pearson Education, Inc.The Case of the Missing Trade A study by Trefler in 1995 showed that technological differences across a sample of countries are very large.Slide 4-37Copyright 2003 Pearson Educa

42、tion, Inc.Empirical Evidence on the Heckscher-Ohlin ModelTable 4-6: Estimated Technological Efficiency, 1983 (United States = 1)Slide 4-38Copyright 2003 Pearson Education, Inc.Implications of the TestsEmpirical evidence on the Heckscher-Ohlin model has led to the following conclusions: It has been l

43、ess successful at explaining the actual pattern of international trade. It has been useful as a way to analyze the effects of trade on income distribution.Empirical Evidence on the Heckscher-Ohlin ModelSlide 4-39Copyright 2003 Pearson Education, Inc. The Heckscher-Ohlin model, in which two goods are

44、 produced using two factors of production, emphasizes the role of resources in trade. A rise in the relative price of the labor-intensive good will shift the distribution of income in favor of labor: The real wage of labor will rise in terms of both goods, while the real income of landowners will fa

45、ll in terms of both goods.SummarySlide 4-40Copyright 2003 Pearson Education, Inc.For any given commodity prices, an increase in a factor of production increases the supply of the good that uses this factor intensively and reduces the supply of the other good.The Heckscher-Ohlin theorem predicts the

46、following pattern of trade:A country will export that commodity which uses intensively its abundant factor and import that commodity which uses intensively its scarce factor.SummarySlide 4-41Copyright 2003 Pearson Education, Inc.SummaryThe owners of a countrys abundant factors gain from trade, but the owners of scarce factors lose.In reality, complete factor price equalization is not observed because of wide differences in resources, barriers to trade, and international differences in technology.Empir